Paying a dividend to the company's shareholders would include a:

Name: Paying a dividend to the company's shareholders would include a:
Brand: Quizplus
Rating: 4.9 (55 reviews)

Question

Quizplus · Accepted Answer

When a company pays a dividend to its shareholders, it is a distribution of profits that have already been earned and recorded as retained earnings. Therefore, the payment of dividends decreases retained earnings and increases the amount of cash that the company pays out. The entry to record the payment of dividends is a debit to Dividends and a credit to Cash.

Paying a Dividend to the Company's Shareholders Would Include A